What Is the Minimum Income to Pay Taxes?

by W D Adkins

For the majority of taxpayers, there is no absolute minimum income for paying income taxes. However, the Internal Revenue Service does set minimum income levels for filing a tax return. These levels vary depending on your age and filing status. In general, you might have to pay income taxes when your income is more than the threshold amount that applies to you.

Federal Income Tax

When the IRS requires you to file a tax return, it doesn’t always mean you owe any income tax. Filing is required when you reach the minimum income at which you might owe income tax. As of 2012, if you filed as single, the threshold was $9,750. For a married couple filing a joint return the minimum to pay taxes was $19,500. If you were married and filed a separate return, it was $3,800. These figures refer to all of your income, including investment earnings and other unearned income, not just wages or salary. When you file, you may be able to write off some expenses or claim tax credits, so it’s entirely possible to have gross income that’s more than the minimum and not owe any federal income tax.

Dependents and Seniors

When someone is claimed as a dependent, she does not get a personal exemption. The threshold for a dependent to file taxes is therefore $5,950 in gross income or $950 in unearned income. If you are at least 65 or you are blind, you get an extra exemption of $1,400 added to the threshold if you file as single or $1,100 if you are married and file a joint return. For example, if both spouses in a marriage are 65 and file a joint return, the threshold is $19,500 plus $2,200, or $21,700, as of 2012.

Special Situations

The minimum to file a return and pay taxes is lower in some situations and can even be zero. If you work for a church, you must file if your income from church work is $108.28. You also have to file if you owe unpaid Social Security taxes. When you take distributions from most tax-deferred accounts such as traditional IRAs, 401(k) plans or Coverdale Education Savings plans, you have to file a return regardless of the amount of gross income. Finally, you have to file if you are subject to a “recapture.” For example, if you were given a tax credit you should not have gotten, the IRS says you have to file so they can get the money back.

Social Security Taxes

When you are paid wages, tips, commissions or salary because you work for an employer, you have to start paying Social Security and Medicare taxes on the first dollar you earn. You don’t pay Social Security or Medicare on capital gains, interest earnings of other unearned income. When you have income from self-employment, a special rule applies. You must file a return and pay Social Security and Medicare taxes when self-employment net earnings are $400 or more, even if you have no other income.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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